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Virginie’s Blog – Data Gems from the Retail Banking World

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Earlier this month I was in diamond capital of the world Antwerp for SAS’s annual European user conference and it was interesting to compare the stories from the vendor’s retail banking clients with those (fewer) speakers from the capital markets. It appears that when it comes to making use of banks’ primary asset, data, the world of retail is leaps and bounds ahead of the capital markets sector, and there are a number of gems to be gleaned for future use.

SAS’s retail banking clients (including South African bank ABSA Retail Bank and UK-based Barclays Bank) and, for that matter, its insurance clients (such as Aviva) took the stage to highlight their use of the vendor’s tools across their risk management, finance and marketing departments. Beyond developing a more joined up approach to the risk function across the various risk silos, a number of these clients have extended the use and sharing of this risk (and reference) data to the finance and marketing functions. Hence, client and counterparty data held in the risk system can be used by the client facing marketing function to tailor particular offerings to a client undergoing financial difficulties.

Aviva’s worldwide head of analytics Rod Moyse explained to attendees that his firm has been able to use data analytics and a common data platform across functions such as finance, treasury and risk management in order to better inform business decisions. This allows for the segmentation of customers into more specific categories and a more tailored approach to meeting their needs, on one side, he explained. It also means that the business as a whole is better informed of any cost reduction strategies that may be required due to the introduction of a more enterprise-wide approach to data.

Incoming pressure from regulations such as Basel III will likely drive some on the capital markets side of the business to consider a more enterprise-wide approach such as this, with a view to reducing costs and optimising capital. But, as yet, it is early days for integration across the various risk types, let alone any other business function, in most investment banks.

Some, like the Royal Bank of Scotland (RBS) with its One Risk project (see more on which here), may be looking to join up the finance and risk function with regards to common reference data. But I certainly haven’t heard anything about joining this up with any sort of marketing function.

Firms in the capital markets sector have tended to rely on the ‘if you build, they will come’ approach to their customers. However, with building regulatory pressure and the post-crisis customer backlash against the community as a whole (you don’t need telling that the negative perception of the industry persists, just read the mainstream press), perhaps these firms should be keeping a closer eye on retail strategies that they could benefit from?

Social media and mobile technology is slowly making its way into the capital markets realm, perhaps other trends will soon follow?

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